Wooley v. N&W Marine Towing

Case: 23-30112 Document: 00517025287 Page: 1 Date Filed: 01/08/2024

United States Court of Appeals

for the Fifth Circuit United States Court of Appeals

Fifth Circuit

____________ FILED

January 8, 2024

No. 23-30112 Lyle W. Cayce

____________ Clerk

In re In the Matter of the Complaint of N&W Marine

Towing, L.L.C., as Owner of M/V Nicholas, its engines,

tackle, appurtenances, furniture, etc., for

Exoneration from or Limitation of Liability

Trey Wooley,

Plaintiff—Appellee—Cross Appellant,

versus

N&W Marine Towing, L.L.C., as Owner of M/V NICHOLAS, its

engines, tackle, appurtenances, furniture, etc., praying for exoneration from or

limitation or liability,

Petitioner—Appellant—Cross Appellee,

versus

Royal Caribbean Cruises, Limited,

Defendant,

______________________________

Case: 23-30112 Document: 00517025287 Page: 2 Date Filed: 01/08/2024

Trey Wooley,

Plaintiff—Appellee—Cross Appellant,

versus

N&W Marine Towing, L.L.C.; Nicholas M/V; Ascot

National Specialty Insurance Company; Starr

Indemnity & Liability Company,

Defendants—Appellants—Cross Appellees.

______________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

USDC Nos. 2:20-CV-2390, 2:21-CV-150

______________________________

ON PETITION FOR REHEARING EN BANC

Before Stewart, Dennis, and Wilson, Circuit Judges.

Cory T. Wilson, Circuit Judge:

Because no member of the panel or judge in regular active service

requested that the court be polled on rehearing en banc, see Fed. R. App.

P. 35; 5th Cir. R. 35, the petition for rehearing en banc is DENIED. Our

prior panel opinion, 83 F.4th 329 (5th Cir. 2023), is WITHDRAWN, and

the following opinion is SUBSTITUTED therefor:

Trey Wooley filed a state court action against N&W Marine Towing

(N&W) and others based on injuries Wooley suffered while serving as a

deckhand on the Mississippi River. Wooley did so despite a district court

stay order entered pursuant to the Limitation of Liability Act of 1851, see 46

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U.S.C. § 30511(c).1 One of the other defendants removed the case, citing

federal diversity and admiralty jurisdiction. Weighing Wooley’s motion to

remand, the district court determined that N&W was improperly joined,

dismissed N&W on that basis, and then, considering the properly joined

parties, concluded that it had diversity jurisdiction and denied remand.

As they did before the district court, the parties on appeal contest

whether this case belongs in state or federal court. N&W contends that,

regardless of whether it was nondiverse from Wooley, and even if it was

improperly joined in Wooley’s state court lawsuit, Wooley’s claims against

N&W should remain in federal court because they arise under that court’s

admiralty jurisdiction, 28 U.S.C. § 1333(1). Wooley cross-appeals, taking the

opposite tack. For the following reasons, we conclude that the district court

properly dismissed N&W from this action, retained the case, and then,

because no other defendants remained, dismissed the case itself.

I.

We detailed much of this case’s voyage in the court’s prior opinion,

In re N&W Marine Towing, LLC, 31 F.4th 968 (5th Cir. 2022) (Wooley I). We

repeat relevant facts and procedural history as necessary.

On August 31, 2020, N&W filed in federal district court a verified

complaint in limitation, Case No. 2:20-cv-2390 (the Limitation Action),

_____________________

1

Effective December 23, 2022, code sections of the Limitation Act were

renumbered. 46 U.S.C. § 30505 was renumbered as 46 U.S.C. § 30523, and 46 U.S.C.

§ 30511 was renumbered as 46 U.S.C. § 30529. For consistency in this case, we use the

prior statutory section numbers; the relevant statutory text did not change.

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pursuant to the Limitation of Liability Act of 1851 (Limitation Act)2 and Rule

F of the Supplemental Rules for Certain Admiralty and Maritime Claims.3

The Limitation Act provides that once a shipowner brings a limitation

action “all claims and proceedings against the owner related to the matter in

question shall cease.” 46 U.S.C. § 30511(c); see Fed. R. Civ. P. Supp.

R. F(3) (similar). The court where such an action is filed “stays all related

claims against the shipowner pending in any forum,” and all claimants must

“timely assert their claims in the limitation court.” Magnolia Marine Transp.

Co. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992).

The complaint filed in N&W’s Limitation Action alleged that on

February 29, 2020, the M/V Nicholas, which is owned by N&W, was towing

six barges up the Mississippi River when the wake of a cruise ship, the Majesty

of the Seas, caused one of the Nicholas’s face wires to break. While the

Nicholas headed towards the riverbank, another face wire broke. The M/V

Assault and its crew came to aid the Nicholas in mending the face wires, at

which time a deckhand on the Assault, Trey Wooley, injured his hand.

_____________________

2

The Limitation Act allows shipowners to “bring a civil action in a district court

of the United States for limitation of liability.” 46 U.S.C. § 30511(a). The law permits

shipowners to limit their liability to “the value of the vessel and pending freight” for a

variety of “claim[s], debt[s], and liabilit[ies]” that might arise from vessels’ activities so

long as the incident giving rise to liability occurred “without the privity or knowledge of

the owner.” 46 U.S.C. § 30505(a)–(b); see Wooley I, 31 F.4th at 970–71 (collecting cases).

3

In pertinent part, Rule F reads:

Upon compliance by the owner with the requirements of subdivision (1) of

this rule all claims and proceedings against the owner or the owner’s

property with respect to the matter in question shall cease. On application

of the plaintiff the court shall enjoin the further prosecution of any action

or proceeding against the plaintiff or the plaintiff’s property with respect

to any claim subject to limitation in the action.

Fed. R. Civ. P. Supp. R. F(3).

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In September 2020, the district court issued the following Stay Order

in accordance with § 30511(c) and Rule F:

The commencement or further prosecution of any action or

proceeding against [N&W], their sureties, their underwriters

and insurers, or any of their property with respect to any claims

for which [N&W] seek[s] limitation of liability herein,

including any claim arising out of or incident to or connected

with personal injury, loss or damage allegedly caused, arising

out of, or resulting from incidents which occurred on the

Mississippi River at approximately mile marker 86-87 on

February 29, 2020, as described in the [Limitation Action]

Complaint, be and the same is hereby stayed and restrained

until the hearing and determination of this proceeding.

Wooley, Turn Services (Wooley’s employer), and Royal Caribbean Cruises

(RCC) (owner of the Majesty of the Seas) all filed claims against N&W in the

Limitation Action. N&W filed counterclaims against Turn Services and

RCC.

On January 8, 2021, the Stay Order in effect, Wooley filed a Petition

for Damages in Orleans Parish, Louisiana, Case No. 2:21-cv-150 (the State

Court Petition). Wooley named N&W, the Nicholas, RCC, the Majesty of the

Seas, and several insurance companies as defendants. Wooley asserted that

the state court had jurisdiction pursuant to the saving to suitors clause, see 28

U.S.C. § 1333(1),4 and alleged that (1) Turn Services was the Jones Act

employer of Wooley while Wooley worked on the Assault; (2) N&W, the

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4

28 U.S.C. § 1333 provides, in relevant part:

The district courts shall have original jurisdiction, exclusive of the courts

of the States, of:

(1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in

all cases all other remedies to which they are otherwise entitled.

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Nicholas, and RCC negligently caused the accident injuring Wooley; and

(3) N&W and RCC were liable to Wooley under “general maritime law

and/or maintaining unseaworthy vessels.”

RCC removed the State Court Petition to federal district court,

asserting diversity jurisdiction and, in the alternative, “admiralty tort

jurisdiction” pursuant to § 1333(1). The district court consolidated the now-

removed State Court Petition with the Limitation Action. Wooley moved to

bifurcate, which the district court denied. Wooley also moved to remand.

On August 8, 2021, before the district court had ruled on his motion

to remand, Wooley moved to stay the Limitation Action and lift the

injunction against proceeding in state court. Wooley stipulated that he would

not seek to enforce any judgment in excess of the value determined in the

Limitation Action in accordance with § 30511 and Rule F. Wooley further

stipulated that the federal court “ha[d] exclusive jurisdiction and authority

to determine all issues relevant to [N&W’s] claim for limitation of liability.”

On August 27, 2021, the district court determined that these

stipulations “adequately protect[ed] N&W’s absolute right to limit its

liability in the federal forum,” and it granted Wooley’s motion to stay the

Limitation Action, allowing him to proceed with the prosecution of his

saving-to-suitors claims. N&W filed an interlocutory appeal, and we

affirmed, noting that “our precedents require district courts hearing

limitation actions to lift a stay against proceedings in other forums when a

claimant makes the appropriate stipulations.” Wooley I, 31 F.4th at 974

(citing Odeco Oil & Gas Co., Drilling Div. v. Bonnette, 74 F.3d 671, 674 (5th

Cir. 1996), In re Two “R” Drilling Co. Inc., 943 F.2d 576, 578 (5th Cir. 1991),

and In re Tetra Applied Techs. L P, 362 F.3d 338, 343 (5th Cir. 2004)). Because

we agreed Wooley’s stipulations passed muster, we concluded that the

district court did not abuse its discretion.

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On February 15, 2023, nearly two years after Wooley filed his motion

to remand, the district court denied it. The court found that “Wooley

blatantly violated [its] Stay Order” by naming N&W in the State Court

Petition, and therefore N&W was “improperly joined.” As a result, the

district court dismissed N&W from the case. Even though Wooley and

N&W were each a citizen of Louisiana, and thus nondiverse, the court

determined that the “state court suit ha[d] no legal effect as to N&W,” and

“removal was proper because there was complete diversity between Wooley

and the properly joined State Court defendants.”5

After dismissing N&W from the case, no claims remained live in the

State Court Petition because Wooley had previously settled his claims against

the other defendants. Therefore, the district court severed Wooley’s State

Court Petition from the Limitation Action and dismissed it without

prejudice. The district court retained jurisdiction over the Limitation Action

but stayed and administratively closed it to allow Wooley to pursue any viable

claims against N&W in Louisiana state court pursuant to the saving to suitors

clause.

N&W and Wooley both appeal. Seeking to remain in federal court,

N&W raises several issues, namely whether: (1) a case is removable if it

contains “general maritime law claims” filed in violation of the district

court’s stay order; (2) the district court abused its discretion in denying

Wooley’s motion to remand; (3) the district court erred in dismissing N&W

and the State Court Petition after lifting the Stay Order; and (4) admiralty

jurisdiction provides an independent basis for removal after the 2011

_____________________

5

Even though RCC initially removed the case based on diversity or, alternatively,

admiralty jurisdiction, the district court appeared to make no finding as to admiralty tort

jurisdiction.

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amendments to 28 U.S.C. § 1441.6 On cross-appeal, Wooley contends that

the outcome of the case was correct, but if this court were to determine that

N&W was properly joined, then Wooley contends the district court erred in

denying his motion to remand.

II.

We review the district court’s finding of improper joinder de novo.

Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 401 (5th Cir. 2013) (collecting

cases). Once a court determines that a nondiverse defendant is improperly

joined, that party must be dismissed from the case. Int’l Energy Ventures

Mgmt. LLC v. United Energy Group Ltd., 818 F.3d 193, 209 (5th Cir. 2016).

Thus, we review whether dismissal of N&W was proper in concert with our

review of improper joinder.

Similarly, we review the district court’s denial of Wooley’s motion to

remand and whether the district court should have exercised jurisdiction over

his claims against N&W de novo. Flores v. Garland, 72 F.4th 85, 88 (5th Cir.

2023); Allen v. Walmart Stores, L.L.C., 907 F.3d 170, 182 (5th Cir. 2018).

“To determine whether jurisdiction is present for removal, we consider the

claims in the state court petition as they existed at the time of removal.”

Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.

2002) (citing Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th

Cir. 1995)).

_____________________

6

N&W frequently uses some form of the phrase “abuse of discretion” in framing

the issues. This is not always correct; for instance, as N&W notes in its briefing, we review

a denial of a motion to remand de novo, not for abuse of discretion.

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A.

The district court found that Wooley improperly joined N&W in the

State Court Petition in violation of its Stay Order and denied Wooley’s

motion to remand as a result. The court did not err in doing so.

“When an action has been brought under [the Limitation Act] and the

[vessel] owner has complied with [§ 30511](b), all claims and proceedings

against the owner related to the matter in question shall cease.” 46 U.S.C.

§ 30511(c). Here, once N&W filed the Limitation Action, all other actions

against N&W related to Wooley’s claims were precluded by § 30511(c).

Wooley thus improperly sued N&W in the State Court Petition when he

proceeded in derogation of the Limitation Act and, relatedly, Rule F and the

district court’s Stay Order. N&W agrees that it was improperly joined, that

its “citizenship should be ignored for purposes of determining diversity of

citizenship,” and that RCC was a properly joined defendant. In fact, N&W

concedes that at the time of removal “there was no possibility of recovery by

Mr. Wooley from N&W due to the District Court’s Limitation Stay

Order[.]”7 Because N&W does not contest the district court’s finding that

_____________________

7

N&W somewhat backtracks on this argument, later stating that “naming

defendants directly contrary to the federal court’s Limitation Stay [] does not pretermit the

possibility of recovery, possible recovery is only delayed.” This latter position is untenable

because, as N&W itself states, “the district court must examine the plaintiff’s possibility

of recovery against the defendant at the time of removal.” See Turner v. GoAuto Ins. Co., 33

F.4th 214, 215 (5th Cir. 2022) (“When a case is removed from state court to federal court

and the plaintiff seeks to have the case remanded, we evaluate the complaint at the time of

removal.”) (citing Bonin v. Sabine River Auth. Of La., 961 F.3d 381, 385 (5th Cir. 2020));

accord Manguno, 276 F.3d at 723. At the time of removal, the Stay Order was in effect, and

under a Federal Rule of Civil Procedure 12(b)(6) analysis, the state court claims against

N&W therefore failed.

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it was improperly joined, we need not relitigate the issue.8 Further, this

(correct) concession largely controls this case.

We begin with improper joinder in diversity cases. Once a court

determines that a nondiverse defendant was improperly joined, that

defendant’s citizenship may not be considered for purposes of diversity

jurisdiction, and that defendant must be dismissed without prejudice. Int’l

Energy Ventures Mgmt., 818 F.3d at 209. The district court correctly followed

that course: Determining that N&W had been improperly joined, the court

considered only the citizenship of the properly joined State Court Petition

defendants. As they were diverse from Wooley, removal based on diversity

jurisdiction was permitted, and N&W was properly dismissed without

prejudice.

The district court did not address Article III admiralty jurisdiction,

which RCC also invoked to support removal of the State Court Petition, but

the result is the same for N&W. As discussed, N&W was improperly joined

because Wooley’s proceeding against it via the State Court Petition was

barred by operation of the Limitation Act and the district court’s Stay Order

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8

Our agreement with the district court that N&W was improperly joined is based

on a Rule 12(b)(6) analysis. See Ticer v. Imperium Ins. Co., 20 F.4th 1040, 1046 (5th Cir.

2021) (To determine whether a defendant was improperly joined, courts conduct a “[Rule]

12(b)(6)-type analysis, ‘looking initially at the allegations of the complaint to determine

whether the complaint states a claim under state law against the in-state defendant.’”

(quoting Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 572 (5th Cir. 2004) (en banc))).

The district court analogized this case to bankruptcy cases to support its conclusion that

N&W was improperly joined in contravention of the Stay Order. To the extent that the

district court reached beyond our precedent, the reach was unwarranted: Applying a Rule

12(b)(6) analysis, Wooley could not state any claim outside the Limitation Action against

N&W by operation of § 30511(c), Rule F, and the Stay Order, leaving a state court no

choice but to dismiss Wooley’s claims against N&W. See Int’l Energy Ventures Mgmt., 818

F.3d at 209 (If “a court determines that a nondiverse party has been improperly joined to

defeat diversity, that party must be dismissed without prejudice.”).

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issued pursuant to the statute and Rule F. N&W invoked—and the district

court exercised—the federal court’s admiralty jurisdiction when it filed the

Limitation Action. More on admiralty jurisdiction later. For purposes of

Wooley’s motion to remand, what matters is that at the time RCC removed

the State Court Petition, there existed no viable claims against N&W outside

of the Limitation Action, admiralty or otherwise. The district court properly

dismissed N&W from the State Court Petition and then denied remand.

B.

Notwithstanding N&W’s agreement that it was improperly joined,

such that no viable claims existed against N&W at the time of removal, N&W

casts several arguments as to why the district court erred in dismissing it from

the case, dismissing the case, and denying N&W immediate passage to

federal court. None are availing.

First, N&W contends that Wooley’s State Court Petition, once

removed, should remain in federal court because Wooley did not “anchor his

case in state court by requesting a jury or asserting a Jones Act claim against

his employer, Turn Services.” N&W cites Barker v. Hercules Offshore, Inc.,

713 F.3d 208 (5th Cir. 2013), to support this contention. In Barker, this court

noted that the “‘saving to suitors’ clause under general maritime law ‘does

not guarantee [plaintiffs] a nonfederal forum, or limit the right of defendants

to remove such actions to federal court where there exists some basis for

federal jurisdiction other than admiralty.” 713 F.3d at 220 (alterations and

emphasis in original) (quoting Tenn. Gas Pipeline v. Houston Cas. Ins. Co., 87

F.3d 150, 153 (5th Cir. 1996)). N&W seizes on this statement to posit that

even if a plaintiff invokes the saving to suitors clause in a state court action,

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that does not prevent removal of the action to federal court under admiralty

jurisdiction.9

Whatever the removability of a state action brought pursuant the

saving to suitors clause, a question we need not answer in today’s case,

N&W’s argument runs aground because N&W offers no authority for a

district court’s maintaining claims in federal court against an improperly

joined party, despite improper joinder. Put differently, the conundrum in

this case arises not from a question of jurisdiction—the district court

properly denied Wooley’s motion to remand the State Court Petition because

it had jurisdiction, after all—but because Wooley proceeded out of order,

flouting the Limitation Act and the Stay Order in the Limitation Action.

Wooley attempted to elect his “choice of remedies” against N&W under the

saving to suitors clause first, and then eight months later, after RCC had

_____________________

9

Barker also states that “maritime cases which are brought in state court” “are

exempt from removal by the ‘saving-to-suitors’ clause of [§ 1333(1)] . . . and therefore may

only be removed when original jurisdiction is based on another jurisdictional grant, such as

diversity of citizenship.” Id. at 219 (citing Romero v. Int’l Terminal Operating Co., 358 U.S.

354, 377–79 (1959); In re Dutile, 935 F.2d 61, 63 (5th Cir. 1991)). Since Barker, our court

has acknowledged the lack of clarity on this point, particularly considering Congress’s 2011

amendment to 28 U.S.C. § 1441:

[W]hether the saving-to-suitors clause of the federal maritime statute

prohibits removal of general maritime claims absent an independent basis

for federal jurisdiction in light of Congress’s December 2011 amendment

to the federal removal statute—is not clear. The vast majority of district

courts considering this question have maintained that such lawsuits are not

removable . . . . However, because there is no binding precedent from this

circuit, see Riverside Constr. Co., Inc. v. Entergy Miss., Inc., 626 [F. App’x]

443, 447 (5th Cir. 2015) (noting that “[t]he Fifth Circuit has not yet

spoken directly on this issue”), there remains a consequential number of

district courts that have held to the contrary.

Sangha v. Navig8 ShipManagement Private Limited, 882 F.3d 96, 100 (5th Cir. 2018)

(citations omitted). While N&W and amici urge this court to clarify this question en banc,

as discussed above the line, it is not necessary for us to do so in the context of this case.

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removed the State Court Petition, belatedly sought to lift the Stay Order in

the Limitation Action. See Wooley I, 31 F.4th at 971 (discussing “tension

between the Limitation Act and the savings to suitors clause” and the

stipulations necessary for a separate “state court action to proceed” (quoting

Odeco Oil & Gas, 74 F.3d at 674)). As the district court correctly concluded,

this meant that, regardless of whether Wooley asserted a Jones Act claim, or

any other, he could not proceed against N&W either at the time he filed the

State Court Petition or when RCC removed it because there were no viable

claims against N&W outside the Limitation Action. And N&W offers no

authority to support the notion that Wooley’s belated stipulations in the

Limitation Action cured that defect. Cf. Cavallini, 44 F.3d at 264–65

(“[T]he rationale for determining removal jurisdiction on the basis of claims

in the state court complaint as it exists at the time of removal is obvious”;

moreover, “after a fraudulent joinder removal, a plaintiff may [not] amend

the complaint in order to state a claim against the nondiverse defendant, and

thus divest the federal court of jurisdiction”).10

Distilled down, N&W’s other arguments for remaining in federal

court veer off course for the same reason. For instance, N&W contends that

once the district court determined removal was proper as to RCC under

diversity jurisdiction, the court should have exercised jurisdiction over the

claims against N&W as well. This argument flies in the face of our precedent

that, once “a court determines that a nondiverse party has been improperly

joined to defeat diversity, that party must be dismissed without prejudice.”

Int’l Energy Ventures Mgmt., 818 F.3d at 209.

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10

Another complicating factor in this case is that the district court’s ruling on

Wooley’s motion to remand came two years after Wooley filed the motion and a year-and-

a-half after the court granted his motion for relief from the Stay Order, which allowed

claims against N&W to proceed—just not in the prematurely-filed State Court Petition.

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Our holding in Flagg v. Stryker Corp., 819 F.3d 132 (5th Cir. 2016) (en

banc), is instructive. In Flagg, a patient alleged that his toe surgery was

unsuccessful and filed a complaint in Louisiana state court against his doctor

and the medical center, as well as the manufacturers of the toe implant. 819

F.3d at 134–35. The manufacturers removed the case based on diversity

jurisdiction. Id. at 135. They asserted they were completely diverse from the

patient and that the medical defendants, who were not diverse, were

improperly joined because the patient had failed to exhaust malpractice

claims administratively prior to filing the state court petition, as required by

Louisiana state law. Id. We agreed, holding that the patient’s failure to

exhaust his claims against the medical defendants meant those claims would

fail under a Rule 12(b)(6)-type analysis. Id. at 138. Thus, those defendants

were improperly joined, and the “state court would have been required to

dismiss [them] from the case.” Id.

The same logic obtains here. As discussed previously, the Louisiana

state court would have had no choice but to dismiss Wooley’s claims against

N&W by operation of § 30511(c), Rule F, and the district court’s Stay Order.

And while N&W offers authority for the proposition that “[o]nce the court

establishes jurisdiction exists, it has a duty to exercise that jurisdiction,”

N&W nowhere explains, much less cites support for, how the district court

could extend jurisdiction over Wooley’s claims against N&W despite its

conclusion that N&W was not a proper party to the State Court Petition.11

This argument sinks of its own weight.

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11

N&W argues that because complete diversity existed when RCC removed the

State Court Petition in view of N&W’s improper joinder, the district court was allowed to

exercise jurisdiction over N&W’s claims as well. N&W cites to Richey v. Walmart Stores,

Inc., 390 F. App’x. 375 (5th Cir. 2010), where this court affirmed a district court’s denial

of remand. Richey is easily distinguishable. There, Richey sued Walmart in state court and

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N&W next lodges several arguments that Wooley’s claims had an

independent basis for federal jurisdiction aside from diversity jurisdiction.

None provides safe harbor. First, N&W argues, somewhat convolutedly,

that once the district court determined removal was proper, Wooley’s

“general maritime claim against N&W” could act as a jurisdictional hook.

N&W similarly argues that the 2011 Amendments to 28 U.S.C. § 1441

“made a substantive change in removal jurisdiction over maritime cases”

and, specifically, that changes to § 1441(b) “may provide an alternative basis

for removal and retention of th[is] case in federal court.” N&W contends

that because Wooley named the Nicholas in the State Court Petition and

because federal courts have exclusive jurisdiction over in rem admiralty

actions, the entire case should have remained in federal court.

To the extent N&W argues that federal courts’ admiralty jurisdiction

dictates that claims asserted pursuant to the saving to suitors clause are

removable based on admiralty jurisdiction alone, N&W prematurely offers an

answer to the wrong question, as Wooley has yet to assert any cognizable

claims against N&W pursuant to § 1333(1). To the extent N&W’s arguments

are of a theme with its contention that so long as the district court had

jurisdiction over some party, then the district court could extend that

_____________________

Walmart removed. At the time of removal, there was complete diversity. After, Richey

attempted to file an amended complaint naming Walmart Stores Texas LLC as a co-

defendant, and Richey moved to remand, arguing that she and Walmart Stores Texas LLC

were nondiverse. We emphasized that courts must examine “whether diversity ‘existed at

the time of removal.’” Id. at 378 (quoting Texas Beef Group v. Winfrey, 201 F.3d 680, 686

(5th Cir. 2000). And “subsequently added defendants cannot divest the district court of

the original jurisdiction it had at the time of removal.” Id. at 378 n.2. Here, N&W was

improperly joined in the State Court Petition from the outset.

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jurisdiction even to an improperly joined one, they run into the shoals of our

improper joinder precedent as well.12

Finally, N&W argues that the district court abused its discretion by

dismissing the case because dismissal is countenanced by neither Rule F nor

the “analogous Fifth Circuit Bankruptcy decisions.” N&W asserts that

under the terms of Rule F(3), a district court may not dismiss a state court

lawsuit once it is properly removed, and a stay order is no longer in effect—

essentially, that Rule F permits a court merely to “pause” other proceedings

pending a Limitation Act stay. This line of reasoning misapprehends the

rationale supporting dismissal of the State Court Petition: The district court

did not conclude that the State Court Petition was without legal effect from

its filing; instead, the court determined that Wooley’s action was “‘void and

without legal effect’ as to N&W . . . .” Given that determination, because all

the other defendants had been dismissed from the State Court Petition, no

case remained before the district court. To accept N&W’s argument would

be to conclude that the district court should have retained jurisdiction over a

case with no defendants, all to resurrect the claims against an improperly

joined one. This cannot be so.13

_____________________

12

N&W seeks to analogize to Williams v. M/V Sonora, 985 F.2d 808, 812 (5th Cir.

1993). In Williams, a case was removed from Texas state court pursuant to the Foreign

Sovereign Immunities Act (FSIA), 28 U.S.C. § 1441(d), because a defendant, Pemex,

qualified as a “foreign sovereign.” 985 F.2d at 810. When Pemex was eventually

dismissed, plaintiffs argued that the case should have been remanded because the only

other basis for federal jurisdiction was admiralty law, and pursuant to the saving to suitors

clause, “admiralty claims . . . are non-removable.” Id. at 812. The district court declined

to remand, and we affirmed, noting that though the case would not have been removable in

the first instance without FSIA jurisdiction, at the time of removal Pemex was a proper

party. Id. Here, by contrast, N&W was not a proper party at the time of removal.

13

N&W’s analogies to bankruptcy proceedings, which are governed by bankruptcy

rules, are unpersuasive for the same reasons as its attempted reading of Rule F. We

therefore decline to address them further.

16

Case: 23-30112 Document: 00517025287 Page: 17 Date Filed: 01/08/2024

No. 23-30112

III.

In his cross appeal, Wooley asserts that the district court erred in

denying his motion to remand. Wooley makes three arguments. We need

not plumb the depths of these contentions, but we will briefly discuss why

each fails.

First, he contends that N&W was not improperly joined and there was

a lack of complete diversity at the time of removal. For the reasons stated

above, we disagree with Wooley and find that the district court did not err in

determining N&W was improperly joined.

Next, Wooley asserts that the State Court Petition was not removable

pursuant to the saving to suitors clause because N&W failed to “identify an

independent basis [for] federal subject matter jurisdiction (other than

admiralty).” Regardless of the merits of Wooley’s argument on this point, it

seeks to answer the wrong question in this case. As thoroughly addressed

already, at the time of removal, no valid claims could be asserted against N&W

in a forum other than the Limitation Action; because Wooley had “blatantly

violated [the district court’s] Stay Order” by naming N&W in the State

Court Petition, N&W was not a proper party, whatever the underpinning for

federal jurisdiction. Besides, the “‘saving to suitors’ clause under general

maritime law ‘does not guarantee [plaintiffs] a nonfederal forum,” Barker,

713 F.3d at 220, though that is an issue for another day.

Finally, Wooley contends the district court lost jurisdiction after it

lifted the Stay Order, and therefore the district court should have granted its

motion to remand. This point is mooted by our conclusion that N&W was

improperly joined, and thus properly dismissed, and by the subsequent

dismissal of the remaining defendants from the State Court Petition.

17

Case: 23-30112 Document: 00517025287 Page: 18 Date Filed: 01/08/2024

No. 23-30112

IV.

N&W was improperly joined as a defendant in the State Court

Petition. When RCC removed the case to federal court, the district court

therefore properly disregarded N&W’s citizenship and dismissed it from the

case. The court likewise properly denied Wooley’s motion to remand. And

once N&W was dismissed, leaving no defendants in the case, the district

court properly severed and dismissed without prejudice the State Court

Petition.

AFFIRMED.

18